Health Care Insurance Update: What Will and Won’t Be Eligible for FSA Reimbursement in 2011

As in any other year, you have until December 31 to use up whatever balance (or spending declaration) you have in your Flexible Spending Account. Unlike Health Savings Accounts, FSA balances do not roll over into the next year. Some companies do provide a grace period that will extend into 2011, so check with your employer’s FSA plan administrator to see if that applies to you. But be aware that changes have been made regarding eligible expenditures that will take effect immediately on the stroke of midnight New Year’s Eve. The most notable is that, thanks to the health care reform act (aka ObamaCare), over-the-counter medications will no longer be eligible expenses UNLESS you have a doctor’s prescription saying you need them. This change also applies to Health Savings Account eligible expenses.

As of January 1, 2011, you’ll need a customer receipt identifying by name you or the person for whom the prescription was written. It will need to show the date and amount of purchase along with the RX number. Good luck trying to get that from your corner convenience store clerk when you run in for cough syrup at 2 in the morning!

If you routinely used non-prescription allergy medications, antacids and similar OTC health care products like those in the partial list below, now would be a great time to use your FSA balance to stockpile supplies. Moving forward, your best strategy may be to make a list of stuff you use on a regular basis and get a single prescription. However, you should check with your FSA plan administrator to make sure this is acceptable.

Acne preparations

Allergy, sinus and decongestant medications

Antacids and antigas preparations

Anti-diarrheals

Anti-fungal medicine

Aspirin and pain relievers

Cough, cold and flu medicine

Diaper rash creams

Hemorrhoid preparations

Laxatives

Sleeping pills

Suppositories

Yeast Infection creams

Certain eligible medications that used to just require a letter of necessity will now also require a prescription. These include calcium and other vitamin and mineral supplements, herbal and homeopathic remedies, hormone therapy and humidifiers. This list is not comprehensive.

Here’s a short list of products that will still be eligible for reimbursement without a prescription after January 1, 2011: